Top 5 Emerging DeFi Trends to Watch in 2025

The first wave of DeFi was about building the basic building blocks: lending, borrowing, and trading. The next wave is about integrating with the real world, leveraging new technologies, and creating a more sophisticated and sustainable financial system. What are the key trends driving this evolution?

DeFi has rapidly matured from a speculative experiment into a sector moving into a new era of real-world utility and technological innovation. The tokenized real-world asset (RWA) sector is expected to hit $2 trillion by 2028, signaling massive institutional interest in decentralized finance’s future.

This article will highlight the top 5 emerging DeFi protocol trends to watch in 2025, exploring how these trends are reshaping the landscape of decentralized finance and creating new opportunities for users and investors, including new tools for accepting crypto payments for business.

Trend 1: Real-World Asset Integration

Tokenization is among the biggest trends in DeFi. Protocols are increasingly focused on integrating tokenized real-world assets like US Treasuries, private credit, and real estate as collateral. The RWA market has surged to $35 billion in 2025, and is evolving into the programmable foundation of global capital markets. BlackRock, JPMorgan, and others expand tokenized assets as regulations, liquidity, and multi-chain access boost the RWA market.

Why it Matters

RWA integration brings stable, real-world yield into DeFi, more sustainable than purely speculative yields. The RWA tokenization market is projected to grow rapidly, reaching $30.1 trillion by 2034. This massively expands DeFi’s total addressable market by connecting traditional finance with blockchain infrastructure.

Tokenized RWAs are providing new avenues for lending and borrowing, allowing owners of tokenized real estate or commodities to pledge digital assets as collateral in decentralized lending platforms.

Protocols to Watch

Centrifuge has achieved $1 billion in Total Value Locked, making it the third RWA protocol to reach this milestone, focusing on tokenizing invoices, receivables, and trade finance instruments. In 2025, Centrifuge completed its V3 migration, delivering unified multichain RWA infrastructure across six EVM chains.

Centrifuge RWA. Source: Centrifuge

Ondo Finance pioneers liquidity-as-a-service with partnerships with 10+ DAOs and commitments from stablecoin issuers. Franklin Templeton’s tokenized money market fund (BENJI) represents $420 million in assets.

Trend 2: The Rise of AI in DeFi

Artificial intelligence is being integrated into DeFi protocols to create more intelligent and automated financial products. The market for these solutions could skyrocket from around $1 billion to $10 billion by the end of 2025.

As of February 2025, CoinGecko has listed 163 DeFAi projects with a combined market cap of nearly $900 billion and a 24-hour trading volume of over $160 million, impacting everything from tools tracking BTC price to AI dashboards that monitor live crypto prices now enhanced with AI analytics.

An example of such projects is Hey Anon, an AI-driven DeFi assistant operating on multiple blockchains, including Solana, Sonic, Base, and Arbitrum.

It simplifies user interactions by allowing natural language commands to execute complex tasks such as token bridging, staking, or swaps, while aggregating real-time data for project insights and market sentiment analysis.

This makes DeFi more accessible to non-technical users through autonomous agents. The native token, ANON, powers the ecosystem’s operations and incentives.

Why it Matters

AI can be used for creating automated actively managed trading strategies, optimizing liquidity provision, and assessing credit risk. AI agents are transforming decentralized finance by streamlining complex processes. Automated trading and portfolio management systems execute trades at the optimum moment and rebalance portfolios.

Agentic AI refers to AI systems that can autonomously make decisions and solve complex problems through sophisticated reasoning and iterative planning, designed to operate independently.

Trend 3: Intent-Centric Protocols

A new generation of intent-centric protocols is emerging. Instead of requiring users to manually perform complex transactions, users simply state their desired outcome, and a network of specialized solvers competes to execute it. Intent protocols like Eco, UniswapX, CoW Swap, and Anoma are transforming how we interact with blockchain. In just under 5 months, UniswapX has done over $1B in volume, despite being in beta.

Why it Matters

This dramatically simplifies the user experience, abstracting away the complexity of gas fees, slippage, and multi-step transactions. Intent-centric architectures streamline user interactions by enabling them to express their goals while leaving the execution details to solvers, enhancing user experience in complex blockchain ecosystems.

The average user doesn’t want to think about gas tokens, bridges, or routing logic. With intent-centric models, DeFi becomes more intuitive and goal-oriented, crucial for onboarding the next billion users.

Leading Protocols

UniswapX is a permissionless, open-source, auction-based protocol designed to enhance on-chain trading using signed off-chain orders that are executed and settled on-chain. In June 2025, Uniswap Labs and Across proposed a standard for cross-chain intents, aiming to create a unified framework.

Leading protocols:source: Uniswapx

CoW Swap utilises batch auctions and Coincidence of Wants (CoWs) to provide structurally better prices, save on gas costs, and reduce execution risk. CoW Protocol boasts impressive monthly retention rates of around 30%, with 50–60% of monthly active users being returning users.

The Anoma protocol provides an intent-centric infrastructure designed to fulfil a wide range of requests, building intents directly into the blockchain architecture as a base layer primitive.

Trend 4: The Re-Emergence of Decentralized Stablecoins

After Terra/Luna’s collapse in 2022, algorithmic stablecoins fell out of favor. However, a new and more sustainable generation of decentralized stablecoins is emerging, often backed by diversified portfolios of crypto assets and RWAs.

Why it Matters

A truly decentralized and censorship-resistant stablecoin is seen as the holy grail of DeFi. The success of this new generation could reduce reliance on centralized, regulated stablecoins like USDC and USDT, which are subject to government control and potential freezing.

Decentralized stablecoins enable DeFi to operate independently of traditional financial infrastructure, creating a parallel financial system resistant to censorship, sanctions, and arbitrary account freezing.

The Path Forward

The key difference from Terra/Luna is sustainability and proper backing. Modern decentralized stablecoins implement overcollateralization, diversified asset backing including RWAs, conservative algorithmic mechanisms, and robust redemption mechanisms.

MakerDAO, now rebranded as Sky, continues to lead with DAI backed by both crypto assets and RWAs. This new approach may eventually enable seamless crypto-to-fiat off-ramp solutions, making stablecoins a true bridge to the real economy.

Trend 5: The Growth of On-Chain Identity

Protocols are building systems for on-chain identity, allowing users to build verifiable track records of on-chain activity. Rather than starting from zero with each protocol interaction, users can accumulate a portable reputation that travels across the DeFi ecosystem.

Why it Matters

A robust identity layer can enable under-collateralized lending, a huge untapped market in DeFi. Currently, DeFi lending requires over-collateralization, depositing $150 worth of assets to borrow $100. This capital inefficiency prevents DeFi from competing with traditional finance for most lending use cases.

With on-chain identity, protocols could assess a user’s repayment history to determine eligibility, protocol interactions, and verifiable on-chain behaviors. This enables new forms of social finance and governance.

A good example is Moca Chain, a modular, EVM-compatible Layer 1 blockchain designed specifically for decentralized identity and data management, emphasizing self-sovereign identity (SSI) to give users full control over their personal information across Web2 and Web3 ecosystems.

Implementation Challenges

The challenge lies in creating portable, verifiable identity systems that maintain user privacy while providing useful information. Solutions must balance transparency with privacy, prevent Sybil attacks, remain portable across chains, and avoid creating exclusionary systems.

Conclusion

The five key trends reshaping DeFi in 2025 are RWA integration, bringing traditional assets on-chain, AI-powered protocols automating complex strategies, intent-centric design simplifying user experience, decentralized stablecoins reducing reliance on centralized issuers, and on-chain identity enabling new financial primitives.

These trends show clear maturation of the DeFi space. The industry is moving away from purely speculative and unsustainable models toward building a more robust, user-friendly, and real-world integrated financial system. Some 86% of Fortune 500 executives now see the benefits of tokenization, with 35% already cooking up tokenization projects.

The convergence of these trends creates a powerful vision: a financial system combining blockchain’s efficiency and transparency with traditional finance’s stability, while maintaining decentralization and user control. While challenges remain around regulation, scalability, and user education, the trajectory is clear.

The pace of innovation in DeFi is relentless. Use Digitap to discover and track the projects at the forefront of these emerging trends, monitor your exposure to these narratives, and position yourself for the next wave of DeFi innovation.

FAQ

What is DeFi?
Decentralized Finance (DeFi) refers to blockchain-based financial systems and applications that operate without traditional intermediaries like banks. DeFi enables peer-to-peer lending, borrowing, trading, asset issuance, and more through smart contracts on public blockchains such as Ethereum and Solana.

What are Real-World Assets (RWA)?
RWAs are tangible or financial assets from the traditional economy, such as real estate, securities, or commodities, that have been tokenized on a blockchain. This tokenization allows these assets to be securely and transparently integrated into DeFi protocols, enabling new liquidity and investment opportunities.

What is an intent-centric protocol?
An intent-centric protocol simplifies user interaction by allowing users to specify desired outcomes rather than detailed transaction steps. Specialized “solvers” compete to execute the user’s intent optimally, abstracting complexities like gas fees, routing, and multi-step transactions. Examples include UniswapX and CoW Swap, which streamline trading and enhance user experience.

Are decentralized stablecoins safe?
Decentralized stablecoins backed by diversified collateral and robust protocols can be safer and more censorship-resistant than centralized ones. However, risks remain from algorithmic design flaws, collateral volatility, and governance challenges. Projects like MakerDAO (now Sky) exemplify how sustainability in decentralized stablecoins can be achieved through overcollateralization and transparent management.

What is the next big thing in DeFi?
Emerging trends such as RWA integration, AI-powered financial automation, intent-centric user interfaces, improved decentralized stablecoins, and on-chain identity/reputation systems collectively represent the next wave. The convergence of these innovations is set to build a more robust, usable, and scalable DeFi ecosystem, enabling broader institutional and retail adoption.